Recently, Life Technologies (LIFE) received 510(k) clearance from the US Food and Drug Administration (FDA) for its StemPro mesenchymal stem cells (MSCs) SFM, a stem cell culture medium. Researches have shown that MSCs play a critical role in the study of regenerative medicine.
At present, several treatments with MSCs are in their initial phases. These potential treatments are being carried out to evaluate their response in heart tissue repair following a heart attack, lung tissue repair in patients with chronic obstructive pulmonary disease as well as Crohn’s disease.
Life’s Cell Systems (CS) division includes all product lines used in the study of cell function, including cell culture media and sera, stem cells and related tools, cellular imaging products, antibodies, drug discovery services and cell therapy related products. During the fourth quarter of 2010, this segment recorded revenues of $238 million, representing 11% growth. The growth was driven by strong demand across the portfolio including double-digit growth in bioproduction and the Dynal beads business.
Lifehas been aiming big in the field of stem cell research. The company had presented details of its stem cell research at the annual meeting of International Society for Stem Cell Research (ISSCR) in June 2010. Over the past 5 years, Life was engaged in various collaborations and partnership programs to strengthen its stem cell products portfolio. The company launched GIBCO Cell Therapy Systems (CTS) to support cell therapy applications, including regenerative medicine.
Huge potential exists in cell-based therapies, which trigger the need for applications to address the unmet medical needs, including neurological disorders, heart disease, cancer, auto-immune disease, infectious disease, as well as tissue repair where conventional pharmaceuticals may be ineffective.
Recommendation
Life enjoys a strong position in the life sciences market and we believe robust performance from its core business along with new product launches will help drive revenues going forward. Meanwhile, lower expenses and cost cutting along with increased revenues should help drive the bottom line.
Additionally, the company is increasing its focus on emerging markets, which bode well for long-term growth. While we are pleased with the company’s strong performance, it could face challenges such as increased competition, unfavorable currency movement and declining demand due to the economic slowdown.
We maintain our Neutral recommendation on the stock which also corresponds to a Zacks #3 Rank (old) in the short term.
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